Search

Subscribe

Archive → May 1st, 2016

In 2015 alone, Illinois state government redistributed more than $12 billion in income and other taxes to local governments. These financial shell games have created a needlessly complex system and make it difficult for local taxpayers to hold their governments accountable.

The Illinois Department of Revenue announced April 19 that the department erroneously made $168 million in overpayments to local governments and school districts across the state. The error occurred while the department executed its tax redistribution program, which sends certain state tax collections to local governments.

The error will soon be corrected; but the real issue is the state shouldn’t make these kinds of tax redistributions in the first place.

Here’s how it has worked for decades:

One unit of government imposes a tax, while another unit of government gets to spend the money. Illinoisans pay income tax to state government, but a part of those collections are redistributed to local governments. That’s precisely what happens under “shared agreements” between the state and local governments. The state government imposes and collects certain taxes and then redistributes them to local governments based on various formulas.

This setup makes it difficult for local taxpayers to hold their governments accountable. Local officials get to spend money they don’t raise locally, while state legislators gain control over billions of dollars that were never meant for the state coffers in the first place.

In a state with nearly 7,000 units of local government, this situation provides ample opportunity for politicians to shield themselves from accountability for levying taxes and spending that money.

In 2015 alone, Illinois state government redistributed more than $12.2 billion in income and other taxes to local governments. That total includes $6.6 billion in education funding for K-12 classrooms and another $5.6 billion the state sent back to local governments for their operations.

For education, the argument for redistribution is that those funds are based on need – that, in general, the poorest districts get a disproportionate share of state funds.

But the remaining $5.6 billion is simply reallocated back to localities based on either their share of the state’s total population or where the tax originated, with no true connection to need.

Under this redistribution practice, there are four major sources of tax revenue the state sends to local governments:

The personal property replacement tax, or PPRT, is an income tax on businesses in addition to the general corporate income tax. In 2015, the state collected $1.4 billion in PPRT, and then redistributed that amount to local governments based on each locality’s historic (as of 1977) pro rata share of those collections.
The local government distributive fund, or LGDF, is based on state personal and corporate income taxes, apart from what’s collected under the PPRT. Of the total 2015 income tax collections, $1.5 billion was deposited into LGDF for further distribution. Local governments receive LGDF funds based on their pro rata share of the state’s population.
The third redistribution payment is based on a portion of the state sales tax. One percentage point of the statewide 6.25 percent sales tax is collected and sent back to the municipalities where those sales occurred. These distributions totaled $2.2 billion in 2015.
Finally, the motor fuel tax resulted in $1.2 billion in revenues collected across the state. Just under 40 percent, or $471.3 million of net collections, was sent to municipalities and counties based on their pro rata share of statewide population.
If governments across Illinois are to be held accountable for how they use tax dollars, lawmakers need to stop the financial shell games that have plagued this state for decades. Illinois can start by eliminating the LGDF, the sharing agreement most targeted for reform in recent years.

However, as these agreements go away, so will the money. That means local governments will need to find savings through spending reforms or by prioritizing the services that warrant funding through local taxes.

A reduction in shared agreements should also be offset with other major reforms to reduce the costs borne by local government. These include:

Reducing workers’ compensation costs
Repealing Illinois’ prevailing-wage law
Reforming the collective bargaining process
Reducing unfunded state mandates
The state of Illinois’ financial shell games have created a needlessly complex system and make it difficult for local taxpayers to hold their governments accountable. If lawmakers are serious about fixing the state’s finances, they need to start by focusing accountability for local tax dollars back onto local governments.

Cartels Help Terrorists in Mexico Get to U.S. to Explore Targets; ISIS Militant Shaykh Mahmood Omar Khabir among Them

Judicial Watch 4/30/2016

Our Corruption Chronicles blog is the place to go to see the truth about the existential national security threat from our nation’s largely unprotected and thoroughly compromised southern border. The report we put this week will have you wondering if anyone here in DC – Republican or Democrat – is thinking about our nation’s safety:

Mexican drug traffickers help Islamic terrorists stationed in Mexico cross into the United States to explore targets for future attacks, according to information forwarded to Judicial Watch by a high-ranking Homeland Security official in a border state. Among the jihadists that travel back and forth through the porous southern border is a Kuwaiti named Shaykh Mahmood Omar Khabir, an ISIS operative who lives in the Mexican state of Chihuahua not far from El Paso, Texas. Khabir trained hundreds of Al Qaeda fighters in Pakistan, Afghanistan and Yemen and has lived in Mexico for more than a year, according to information provided by JW’s government source.

Now Khabir trains thousands of men-mostly Syrians and Yemenis-to fight in an ISIS base situated in the Mexico-U.S. border region near Ciudad Juárez, the intelligence gathered by JW’s source reveals. Staking out U.S. targets is not difficult and Khabir actually brags in anItalian newspaper article published last week that the border region is so open that he “could get in with a handful of men, and kill thousands of people in Texas or in Arizona in the space of a few hours.” Foreign Affairs Secretary Claudia Ruiz, Mexico’s top diplomat, says in the article that she doesn’t understand why the Obama administration and the U.S. media are “culpably neglecting this phenomenon,” adding that “this new wave of fundamentalism could have nasty surprises in store for the United States.”

This disturbing development appears on the Open Source Enterprise, the government database that collects and analyzes valuable material from worldwide print, broadcast and online media sources for the U.S. intelligence community. Only registered federal, state and local government employees can view information and analysis in the vast database and unauthorized access can lead to criminal charges. Updated data gathered on Khabir reveals he’s 52 years old and was ordered to leave Kuwait about a decade ago over his extremist positions. Khabir is currently on ISIS’s (also known as ISIL) payroll and operates a cell in an area of Mexico known as Anapra, according to the recently obtained information.

A year ago Judicial Watch reported on an ISIS camp in this exact area, just a few miles from El Paso. JW’s April 14, 2015 report identified Anapra as the location of the ISIS base, details that were provided to JW by sources that include a Mexican Army field grade officer and a Mexican Federal Police Inspector. Anapra is situated just west of Ciudad Juárez in the Mexican state of Chihuahua. At the time JW reported that another ISIS cell was established to the west of Ciudad Juárez, in Puerto Palomas to target the New Mexico towns of Columbus and Deming. Sources told JW that, during the course of a joint operation, Mexican Army and federal law enforcement officials discovered documents in Arabic and Urdu, as well as “plans” of Fort Bliss – the sprawling military installation that houses the US Army’s 1st Armored Division. Muslim prayer rugs were recovered with the documents during the operation.

A few months later JW reported that Mexican drug cartels are smuggling Middle Eastern terrorists into a small Texas rural town near El Paso and that they’re using remote farm roads-rather than interstates-to elude the Border Patrol and other law enforcement barriers. The foreigners are classified by the U.S. government as Special Interest Aliens (SIA) and they are transported to stash areas in Acala, a rural crossroads located around 54 miles from El Paso on a state road – Highway 20. Once in the U.S., the SIAs wait for pick-up in the area’s sand hills just across Highway 20. At the time JW’s government sources revealed that terrorists have long entered the U.S. through Mexico and in fact, an internal Texas Department of Public Safety report leaked by the media documents that several members of known Islamist terrorist organizations have been apprehended crossing the southern border in recent years.

Earlier this year, as part of an ongoing investigation into national security risks in the porous southern border, JW obtained evidence that proves the U.S. government has known for more than a decade about the partnership between terrorists and Mexican drug cartels. State Department documents made public by JW in January say that for at least ten years “Arab extremists” have entered the country through Mexico with the assistance of smuggling network “cells.” Among them was a top Al Qaeda operative wanted by the FBI. Some Mexican smuggling networks actually specialize in providing logistical support for Arab individuals attempting to enter the United States, the government documents say. The top Al Qaeda leader in Mexico was identified in the September 2004 cable from the American consulate in Ciudad Juárez as Adnan G. El Shurkrjumah. The cable was released to Judicial Watch under the Freedom of Information Act (FOIA).

We see debate in the presidential campaign about building a wall with Mexico but our reporting suggests the debate ought to focus on more immediate security measures such as the deployment of our military to secure the border. We’ll keep on the alert for you. In the meantime, please share the word and perhaps ask your elected officials why they’re AWOL on border security in the face of this potentially catastrophic threat from Islamic terrorists.